China Releases Hainan FTP Encouraged Industries Catalogue
On 27 January 2021, the National Development and Reform Commission, the Ministry of Finance, and the State Administration of Taxation of the PRC jointly issued the Hainan Free Trade Port Encouraged Industries Catalogue (2020 Edition) (hereinafter referred to as the Catalogue), which shall be implemented from 1 January 2020 to 31 December 2024.
The Catalogue is divided into the following two parts:
- The encouraged industries in the current national industrial catalogue, which include the encouraged industries in the Guiding Catalogue for Industrial Structure Adjustment and industries in the Catalogue of Encouraged Industries for Foreign Investment. Foreign invested enterprises shall be subject to the Catalogue of Encouraged Industries for Foreign Investment.
- Newly added encouraged industries of Hainan Free Trade Port.
The newly added encouraging industries of Hainan Free Trade Port focus on the tourism, modern services and high-tech industries, which are highlighted in the Master Plan for the Construction of the Hainan Free Trade Port, cover 14 more major categories and 143 sub-industries, including hotels, Hainan-style rural homestays, exhibition services, quality inspection technology services, shipping related financial services, new energy vehicle manufacturing, 5G and 6G technology development and commercial application.
According to the Circular on Hainan Free Trade Port Preferential Corporate Income Tax Policies (Cai Shui [2020] No.31) issued by the Ministry of Finance and the State Taxation Administration of the PRC, eligible enterprises in encouraged industries are entitled to corporate income tax at a reduced tax rate of 15% during the period from 1 January 2020 to 31 December 2024..
And according to the Master Plan for the Construction of the Hainan Free Trade Port, products manufactured by Hainan enterprises in encouraged industries, including output products whose added value exceeds 30% after the domestic processing of imported intermediary products, are exempt from import duties.
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